Labor & Employment Law Daily Wrap Up, LITIGATION NEWS, TRENDS—CFPB, Vought seeks stay of suit to prevent ‘dismantling’ of CFPB pending ongoing appeal, (Apr 17, 2025)

By Joe Cox, J.D.

Defendants’ appeal of a preliminary injunction is pending and is the basis for a stay or extension.

In a suit filed by the National Treasury Employees Union (NTEU) and a group of other plaintiffs, the Consumer Financial Protection Bureau and its Acting Director, Russell Vought, have filed a motion to stay or extension of time. A preliminary injunction arising from the suit is under appeal from the CFPB and it is on that basis that defendants seek a stay or extension, so that the appellate court may issue its ruling before any further action proceeds at the trial court level (National Treasury Employees Union v. Vought, No. 1:25-cv-00381-ABJ (D.D.C. Apr. 15, 2025)).

Background. The suit, filed by the NTEU and others, seeks to restrain Vought and fellow Trump administration employees from “dismantling” the CFPB. Immediately with the filing, the collection of plaintiffs sought a temporary restraining order. That was converted to a petition for a preliminary injunction, which was granted by the trial court in late March. The court found a substantial risk that in the absence of injunction relief, Vought and other defendants would complete destruction of the CFPB before the court could rule. Accordingly, a broad preliminary injunction was issued.

Among the provisions of the injunction was a direction that the CFPB preserve all records and data, that the CFPB reinstate probationary and term employees terminated after Feb. 10, 2025, and that the CFPB not terminate further employees without cause and not issue RIF notices (see Banking and Finance Law Daily, Mar. 31, 2025).

The CFPB and Vought immediately appealed from the issuance of the preliminary injunction. The appellate court has already entered an order staying provisions such as the requirement of reinstatement, while the mandate against further termination has been amended to allow terminations but requires that the CFPB conduct particularized assessments to determine if employees are no longer needed to carry out CFPB statutory duties (see Banking and Finance Law Daily, Apr. 14, 2025).

Other matters in the appeal remain pending. A briefing on the appeal is scheduled to be completed by May 13, 2025, with argument scheduled for May 16, 2025.

Pending motion. The CFPB and Vought have now filed a petition for a stay of proceedings at the trial court level pending resolution of the appeal of the preliminary injunction. In the alternative, should that motion be denied, the CFPB and Vought requested an extension to file a response to the plaintiffs’ amended complaint until 30 days after denial of the motion.

In the memorandum accompanying the filing, Vought and the CFPB rely on two principal arguments: first, that a stay promoted judicial economy by awaiting guidance from the appellate court on legal issues and second, that in lieu of a stay, the court should instead grant an extension of time for the defendants to respond to the plaintiffs’ amended complaint until the appellate issues are resolved.

The defendants note the expedited schedule in place of the appeal and argue that neither a brief stay nor an extension of time for filing would prejudice the plaintiffs. Within the motion is a note that plaintiffs did not consent to a stay, but would consent to an extension for filing so long as defendants produce the administrative record. That said, the CFPB and Vought argue that producing the administrative record is essentially a practical impossibility and accordingly objected to doing so.

Attorneys: Deepak Gupta (Gupta Wessler LLP) for National Treasury Employees Union. Brad P. Rosenberg, U.S. Department of Justice, for Russell Vought.

Companies: National Treasury Employees Union

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